Commercial Court Covid BI case set to impact composite policy interpretation

The specialist London-based Commercial Court – a division of the UK’s High Court – has heard the latest stage in an ongoing business interruption (BI) insurance case brought by Bath Racecourse Company and others against Liberty Mutual Insurance Europe, Allianz Insurance and Aviva Insurance that has potential ramifications on the interpretation of composite policies.

The claimants, represented by law firm Stewarts, seek indemnity for Covid-19-related business losses that they believe were covered under bespoke BI policies held by various sporting venues across the UK.

The hearings took place between 20 and 22 May 2025 and followed earlier wins for the claimants in both the High Court and Court of Appeal, dated January 2024 and February 2025 respectively.

This latest round of legal action, however, examined two issues that have potentially wider implications for the UK insurance market.

The first relates to whether sporting regulators the British Horseracing Authority (BHA) and the Greyhound Board of Great Britain (GBGB) qualify as a ”competent authority” under the policy wording.

This definition is key to deciding whether decisions made by those bodies to suspend events during the Covid-19 pandemic in 2020 fall within the scope of the BI policy’s non-damage denial of access cover.

The second issue concerns the phrase “any one loss” and how indemnity limits apply. The claimants argue that the wording could entitle them to multiple sublimits – either per affected premises or per cancelled event – rather than a single aggregated limit.

James Breese, partner at Stewarts and solicitor for the claimants, said: “This ‘any one loss’ phrase has not been considered in this context and has market-wide significance.

“If we were right on our interpretation of what ‘any one loss’ means, then that would set a new precedent for how that term is meant to operate in insurance policies.”

Ambiguity of words

Breese added that the ambiguity of the current BI wording on his claimants policies left room for dispute. He said: “The problem with this wording is that it’s not a model of clarity. There are no express provisions to say that it operates in the way that insurers say it operates.”

The case outcome could influence how composite policies – those covering multiple entities within a corporate group – are interpreted. The Court of Appeal’s decision in this case previously found that cover was applied per insured entity rather than across the group. The current hearing, however, explores whether this principle could extend further, potentially on a per event basis.

The judgment from the Commercial Court is expected within four to six weeks.

Meanwhile, the Supreme Court is exploring a separate dispute regarding the same claimants, issued in April 2025, concerning whether staff furlough payments made by the government should be deducted from claim payout totals. This decision could have multibillion pound implications for the insurance industry.

The case was heard by Sean O’Sullivan KC, who was sitting as a deputy High Court judge. Counsel for the claimants includes Adam Kramer KC and Will Day of 3 Verulam Buildings.

There is an impending deadline for filing Covid-19 BI claims, as the limitation period will expire in March 2026.